UC-NRLF 


/■rwv^      tj^j    i^^^q 


BREAKERS  AHEAD. 


AXIg^' 


CI^SE  OF  THE  PRESEWT  €fe\S\S- 


FALLING  PRICES  AND  BUSINESS  STAGNATION 
ACCOUNTED  FOR. 


CONNECT/ON  WHATEVER  BETWEEN  THE  DISEASE  AND 
THE  REM  ED  V  WHICH  THE  SIL  VER  Q  UACKS  PRESCRIBE. 
AN  ANALYSIS  OF  THE  SITUATION 


By  DAVID  A. \ WELLS 


L.U. 


CIRCULATED    BY    THE 


DEMOCRATIC  HONEST  MONEY  LEAGUE  OF  AMERICA, 

15  West  24th  St.,  New  York  City. 


1896. 

JERSEY  CITY,   N.  J. 

THE  JERSEY  CITY  PRINTING  COMPANY, 
37  Montgomery  Strbbt. 


i^C^" 


•    •  •  ,  • 


•     •••••• 


touched  the 
tendency j 


BREAKERS    AHEAD. 


CAUSE     OF    THE     PRESENT     CRISIS. 


FALLING  PRICES  AND  BUSINESS  STAGNATION  ACCOUNTED  FOR. 

NO    CONNECTION    WHATEVER    BETWEEN    THE 

*:^iSCASC    AND    THE     REMEDY    WHICH    THE    SILVER    QUACKS    PRESCRIBE- 

AN    ANALYSIS    OF    THE    SITUATION. 


BY    DAVID    A.    WELLS. 


When  Mr.  Webster  rose  in  his  place  in  the  Senate  pf  the  United  States — January  26, 
1830 — to  reply  to  Mr.  Hayne,  of  South  Carolina,  and  made  what  is  now  admitted  to  be  the 
most  celebrated  speech  ever  delivered  in  this  country  on  the  character  of  our  political 
system  as  a  government,  he  prefaced  it  with  the  following  exordium  : 

' '  When  the  mariner  has  been  tossed  for  many  days  in  thick  weather  and  on  an  un- 
known sea,  he  naturally  avails  himself  of  the  first  pause  in  the  storm  to  take  his  latitude 
and  ascertain  how  far  the  elements  have  driven  him  from  his  true  course.  Let  us  imitate 
his  prudence,  and  before  we  float  further  on  the  waves  of  debate  refer  to  the  point  from 
which  we  departed,  that  we  may  at  least  be  able  to  conjecture  where  we  now  are." 

What  advice  could  be  more  applicable  to  the  present  situation  of  the  country  ?  What 
could  be  more  prudent  and  desirable,  "  before  we  float  further  on  the  waves  of  a  debate  " 
that  antagonizes  the  interests  of  the  people  of  a  common  country,  and  threatens  the 
stability  of  its  common  government,  than  that  we  refer  to  the  points  from  which  we 
have  drifted,  that  we  may  at  least  be  able  to  conjecture  where  we  are  now  ? 


» 


ANALYSIS  OF  THE  SITUATION, 


Unquestionably  the  first  or  starting  point  in  this  inquiry  is  the  recognition  of  the  ex- 
istence among  the  masses  of  an  almost  universal  feeling  of  grievance  and  discontent.  The 
second  point,  equally  unquestionable,  is  that  this  feeling  of  grievance  and  discontent  is 
mainly  referable  to  a  comparatively  recent  and  universal  fall  in  the  prices  of  the  products 
of  labor — i.  e.,  commodities — and  stagnation  of  business,  and  a  limitation  of  the  sphere  of 
employment  for  labor,  which  are  always  the  consequences  of  falling  markets. 

The  third  point  in  order  of  importance  for  consideration  is  the  cause  or  occasion  of 
these  remarkable  price  phenomena  ;  and  until  a  consistent,  clear  and  truthful  answer  is 
found,  and  accepted,  it  is  of  little  use  to  speculate  how  the  above-mentioned  grievances 
and  discontents  can  be  remedied. 

A  very  general  and  popular  assumption  and  assertion  on  the  part  of  many  who  claim 
to  speak  with  authority  and  on  the  basis  of  a  thorough  investigation  of  this  subject  is  that 
it  has  been  occasioned  by  what  is  called  the  "demonetization"  or  intentional  restriction 
of  the  use  of  silver  for  money,  or  as  a  medium  of  exchange. 


S*f80'l4 


The  following  are  illustrations  of  utterances  and  assertions  of  thi^  character 

The  only  issue  of  the  campaign  is  silver.     The  tariff  is  such  *a  secondary  iss\.  .e 

people  are  not  thinking  about  it.  The  trouble  is  not  there.  They  want  prosperity^  i  .ley 
want  to  get  rid  of  paralysis  of  business.  The  Democratic  party  has  decided  that  the 
trouble  hes  m  the  financial  system,  and  that  the  remedy  is  the  remonetization  of  silver.— 
Arthur  Scfivajl^  Populist  j:^ndi.iate  for  Vice-President,  Bath,  Me.,  July  31,  1896. 

We  prv>pp^^fe  to  ^tcvp  thi&fallof  prices  of  farms  and  of  farm  products.  How?  By  issu- 
ing two  50-cent  dollars  for  one  of  go^d.— Reported  speech  of  George  F.  Williams,  of  Massa- 
chusetts^, ^ottUe^farmv^rJi^of  Y^rtrp^tj^t^* 

The-I^l^feYorth:  of ^the thic^go*  Convention  declares  "that  the  act  of  1873  demonetizing 
silver  without  the  knowledge  or  approval  of  the  American  people  has  resulted  in  the  ap- 
preciation of  gold  and  a  corresponding  fall  in  the  prices  of  commodities  produced  by  the 
people." 

But  they  (the  bimetallists)  ...  are  agreed  that  only  a  prompt  return  to  bimetal- 
lism can  check  the  appreciation  of  gold  and  stoo  the  disastrous  fall  in  prices.— Wharton 
Barker,  July  i,   i8g6. 

Disaster  has  come  year  by  year  under  the  single  gold  standard.  With  falling  prices 
over  the  world,  investment  and  enterprise  have  been  paralyzed.— G.  G.  Vest,  United 
States  Senate,  July  3,  1896. 

If  I  understand  the  position  of  Mr.  Reed,  General  Walker,  Mr.  Lodge  and  the  Repub- 
lican party  correctly,  it  is  this  :  They  believe,  as  we  do,  that  the  situation  of  the  country  is 
disastrous  in  the  extreme  ;  they  believe  that  the  cause  of  our  disasters  is  largely  if  not 
wholly  due  to  a  contraction  of  the  currency  caused  by  the  demonetization  of  silver,  and 
they  have  pledged  themselves  to  try  to  correct  this  great  evil  by  an  international  agree- 
ment to  restore  silver  to  its  old  place.— Speech  of  Broc-ks  Adams,  Esq.,  Boston,  August  12, 
1896. 

Now  for  these  assumptions  and  assertions  there  is  not  the  slightest  warrant,  or  a  scin- 
tilla of  confirmatory  evidence.  Mere  assertions,  however,  m  support  of  this  statement  will 
not  do,  and  a  demand  for  the  most  absolute  proof  is  legitimate.  If  it  cannot  be  given  to 
the  fullest  and  most  unanswerable  extent,  let  the  jury  of  the  great  American  Republic, 
without  rising  from  their  seats,  give  a  verdict  for  the  defendant. 

THE  PHENOMENAL  FALL  IN  PRICES. 

The  proof  is  multiple  in  its  nature.  In  the  first  place,  this  phenomenal  fall  of  prices 
has  been  universal.  It  has  manifested  itself  in  all  countries,  whatever  may  be  their 
medium  of  exchange — copper,  silver,  gold,  cocoanuts,  pigs  or  bananas,  the  two  latter  being 
currency  in  some  of  the  South  Pacific  islands.  The  Esquimaus  of  Greenland,  although 
they  probably  have  no  such  word  as  "  money  "  or  "  currency  "  in  their  language,  have  ex- 
perienced it,  because  they  have  found  out  that  the  men  who  come  to  them  in  ships  will  not 
give  as  many  coats  or  knives  in  exchange  for  their  peculiar  products  as  they  formerly 
would.  The  Indians  who  gather  Peruvian  bark  (cinchona)  in  the  forests  of  South  America 
cannot  get  as  much  as  25  per  cent,  of  what  they  received  twenty  years  ago  in  payment  for 
the  products  of  their  labor.  The  cultivators  and  dealers  in  opium  in  India  did  not  receive 
in  1895  for  the  sale  of  their  products — mainly  to  the  Chinese — as  much  by  many  million 
dollars  as  they  did  ten  or  fifteen  years  ago.  If  the  present  low  price  of  wheat  is  a  grievance 
to  the  American  farmers,  it  is  equally  so  to  the  Russian  peasants,  the  Indian  ryots,  the 
growers  in  Argentina  and  Manitoba  and  the  Austro-Hungarian  producers.  For  the  price 
of  wheat,  making  allowances  for  variations  in  the  cost  of  transportation  to  the  great  cereal 
market  of  the  world,  namely,  Liverpool,  is  fixed  by  its  price  in  that  market,  and  is  always 
the  same  to  all  competitive  producers. 

THE  EXTENT  AND  CHARACTERISTICS  OF  THE  FALL  IN  PRICES. 

It  is  obvious,  therefore,  that  the  phenomenal  fall  of  prices  under  consideration  could 
not  have  proceeded  from  any  local  agency.  The  determining  cause,  whatever  it  may 
have  been,  has  also  not  acted  uniformly.  In  the  case  of  a  majority  of  the  commodities 
that  constitute  the  bulk  of  the  world's  trade  and  commerce,  the  average  decline  in  price 
during  the  last  twenty  or  twenty-five  years — or  since  1873 — as  calculated  both  in  the  United 
States  and  Europe  with  the  utmost  care  from  reliable  data,  has  been  from  30  to  40  per 
«ent.    Since  1891  cotton,  wheat,  iron,   copper,  wool,  hides,  leather  and  petroleum  toave 

4 


touched  the  lowest  prices  of  the  century.  A  comparatively  few  articles  have  exhibited  n» 
tendency  to  decline  in  price,  but  rather  the  reverse.  In  the  case  of  labor,  the  average 
^rate  of  wages,  or  the  share  of  product  which  the  laborer  receives,  has  in  all  civilized 
countries  greatly  increased  since  1870,  and  has  undoubtedly  been  greater  than  during  any 
previous  period  in  the  world's  history.  The  average  rate  of  wages  in  the  United  States 
was  highest  in  1S90,  and  the  average  rate  paid  to-day  in  this  country  is  higher  than  that  of 
any  other. 

A  NEW  PHASE  OF  POPULAR  INSANITY, 

As  to  the  cause  of  this  phenomenal  decline  in  the  world's  prices  there  is  a  marked  di- 
versity of  opinion.     And  in  prosecuting  an  investigation  concerning  it,  the  inquirer  will 
first  find  himself  confronted  with  a  remarkable  mental  rather  than  a  material  phenomenon, 
>\  hich  seems  to  find  an  .analogy  and   antetype  in   the   so-called  dancing  madness  of  the 
IMiddle  Ages,  when  many  people  felt  obliged  to  dance   in   order  to  secure  their  salvation, 
namely,  the  "  craze,"  as  it  may  be  legitimately  termed,  that  has  lately  characterized  the 
people  of  the  United  States  in  attributing  all  their  recent  or  present  experience  of  trouble 
and  discontent  to  something  which  has  befallen  silver.    That  there  is  nothmg  exaggerated 
or  unwarranted  in  this  statement,  is  proven  by  the  fact  that  nothing  like  it  exists  in  any 
other  country.     There  is  much  present   disquietude   among  the  masses  of  England  and 
Scotland,  but  the  price  of  silver  is  not  popularly  regarded  as  a  factor   in  it.      The  gnev- 
ices  of  Ireland  still  remain  unredressed,  but  no  Irish  Member  of  Parliament  is  on  record 
-  proposing  that  things  may  be  made  better  for  his   people  by  altering  the  relation  of  sil- 
jr  to  the  present  currency  that  circulates  in  Ireland  or  in  the  United  Kingdom.     There  is 
;  )  lack  of  discontent  among  the  agriculturists  of  Germany,  but  their  movements  for  relief 
re  centered  in    obtaining    higher   protective  duties  on  the  imports   of  wheat  and  meat 
•  )m  Russia  and  the  United  States,  and  increased  bounties  on  the  production  and  export  of 
ueet  sugar.     In  Austria- Hungary  the   predominating   theme  of  popular  interest  is  the  re- 
lation of  the  State  to  the  Jews,  and  not  silver.      In  the    Dominion   of  Canada,  so  alike  in 
many  respects  to  the  United  States,  the  interest  of  its  people  in  respect  to  silver  is  mainly 
limited  to  an  apprehension  of  evil  from  unwise  legislation  on  the  subject  by  its  powerful 
neighbor.     In  short,  there  is  not  a  country  in  the  world,  except  the  United  States,  where 
Its  people  are  even  so  much  as  dreaming  of  changing  the  existing  personnel  of  their  Gov- 
ernments by  reason  of  anything  which  it  may  or  may  not  do  in  respect  to  silver. 

THE  PRESENT  POSITION   OF  BIMETALLISM, 

There  is  a  good  deal  of  talk  about  bimetallism.  But  bimetallism  is  one  thing  and  free 
coinage  of  silver  another  and  very  different  thing.  The  former  has  for  its  object  ah  agree- 
ment among  the  great  commercial  nations  as  to  a  common  money  value  basis  in  which  the 
commerce  of  the  world  shall  be  carried  on.  Free  coinage,  as  advocated  in  the  United 
States,  has  for  its  object  the  carrying  on  of  the  trade  and  commerce  of  a  single  country  on 
a  money  basis  that  none  of  the  other  great  commercial  nations  will  adopt,  or  for  a  moment 
tolerate  ;  and  which,  if  adopted  by  the  United  States,  will  practically  exclude  her  from  the 
roll  of  great  commercial  nations. 

Interest  in  the  so-called  bimetallism  is  also  rapidly  dying  out,  and  will  never  be  again 

what  it  has  been,  because  governments  are  beginning  to  recognize  that  the  relative  future 

\'alue  of  gold  and  silver  when  used  as  money  is  going  to  be  determined  and  varied  by  the 

rierchants  of  the  world   and  not  by  legislation;   and  the  merchants   of  the  world  are  not 

oriirous  of  doing  anything  in  the  matter,  because  they  recognize   that  under  the  existing 

;.ate  of  things  the  commerce  of  the  world — domestic  and  international — is  rapidy  increasing 

id  is  greater  at  the  present  time  than  during  any  period  of  the  world's  history. 

UNWARRANTED  SUPPOSITIONS  AS  TO   THE  FALL  OF  PRICES. 
APPRECIATION  OF  GOLD   THEORY. 

Granting,  as  every  intelligent  person  must,  that  the  recent  universal  decline  in  prices 
cannot  be  due  to  any  local  agency,  but  must  be  attributed  to  some  universal  influence,  it 
i  s  claimed  that  such  an  influence  is  to  be  found  in  an  appreciation  in  the  value  or  purchas- 
1  n^  power  of  gold,  owing  to  its  limited  and  insufficient  supply  ;  and  also  that  this  decline 

5 


I 

in  prices  followed  the  so-called  demonetization  of  silver  in  some  countries,  and  closing  of 
the  mints  of  other  countries  to  its  coinage.  The  appreciation  of  gold  (helped  by  an  alleged 
enforced  scarcity  of  silver)  and  a  decline  in  price  seem,  therefore,  to  stand  to  each  other  in 
the  relation  of  cause  and  effect,  and  the  cause  of  the  advocates  of  silver  has  accordingly  at 
the  outset  much  of  plausibility.  But  plausibility  is  not  proof,  nor  assumption  truth,  as  is 
strikingly  illustrated  by  the  claim  of  the  Rev.  Jasper,  pastor  of  the  first  colored  church  in 
Richmond,  Va.,  that  "  the  sun  do  move,"  and  the  earth  "do  stand  still,"  and  who  has 
more  of  seeming  facts  in  support  of  his  faith  than  can  be  adduced  by  the  advocates  of  the 
gold  appreciation  theory.  For  cannot  everybody  with  eyes  see  the  sun  move  up  every 
morning  in  the  east  and  move  down  every  evening  in  the  west  ?  And  if  the  earth  moves . 
nineteen  miles  every  second,  as  the  astronomer  bugs  tell  us,  would  not  every  movable 
thing  fly  off  its  surface,  as  mud  does  from  a  revolving  carriage  wheel?  And  as  nothing 
does  fly  off,  is  it  not  certain  that  the  earth  stands  still  ?  Investigation  in  the  case  of  the 
Rev.  Jasper  and  the  advocates  of  the  gold  appreciation  theory  will,- however,  lead  to 
different  conclusions.  It  is  to  be  noted  in  the  first  place  that  the  advocates  of  the  latter 
theory,  in  stating  what  they  assert  to  be  the  truth,  never  express  themselves  other  than 
generally.  In  all  that  has  been  written  or  spoken  in  support  of  the  gold  theory  on  either 
side  of  the  Atlantic— from  President  Andrews,  of  Brown  University:  "Coin  "Harvey, 
General  Walker,  Frederick  Williams  and  Senator  Peffer,  down  to  that  silly  Englishman, 
Moreton  Frewen— no  one  has  ever  been  able  to  name  a  single  commodity  that  has  notably 
decHned  in  prices  within  the  last  thirty  years,  and  satisfactorily  proved,  or  even  attempted 
to  prove,  that  such  decline  was  due  to  the  appreciation  of  gold.  And  the  reason  for  such 
default  is  that  it  cannot  be  done. 

On  the  other  hand,  not  a  single  commodity  that  has  notably  declined  m  price  within 
this  time  can  be  named,  in  respect  to  which  clear,  abundant  and  specific  evidence  cannot 
be  adduced  in  proof  that  this  decline  has  been  due  to  decreased  cost  of  production  or 
distribution,  or  to  changes  in  supply  and  demand  occasioned  by  wholly  fortuitous  circum- 
stances. Nobody,  furthermore,  has  ever  risen  to  explain  the  motive  which  has  impelled 
the  honest  sellers  of  merchandise  all  over  the  world  during  the  last  twenty-five  years  to 
take  lower  prices  for  their  goods,  in  the  face  of  an  unexampled  abundance  of  capital  and 
remarkably  low  rates  of  interest,  except  for  one  or  both  of  two  reasons :  excess  of  supply, 
or  diminished  demand.  Has  any  one  ever  attempted  to  explain  how  it  has  happened  that 
during  the  recent  period  of  the  fall  of  prices  the  world's  stock  of  money,  and  especially  of 
silver,  has  been  constantly  increasing  ?  The  following  question,  put  by  Professor  Lexis, 
the  German  economist,  to  those  who  contend  that  there  has  been  an  appreciation  in  the 
intrinsic  value  of  money  has,  furthermore,  never  been  answered,  namely  .  How  is  it 
possible  that  the  United  States,  which  from  1878  to  1893  issued  more  silver  money,  or  sil- 
ver covered  notes,  than  all  the  countries  of  Europe  had  issued  in  a  hke  period  previous  to 
1893;  that  coins  annually  and  mainly  from  the  product  of  its  own  mines  a  large  amount  of 
gold— $43,933,000  in  1895;  that  maintains  a  circulation  of  346,000,000  of  legal  tenders 
(greenbacks),  issued  for  the  purpose  of  collecting  a  forced  loan  for  the  prosecution  of  the 
war;  that  specially  and  artificially  regulates  the  price  in  its  own  markets  of  not  a  few  of 
the  great  commodities  of  the  world  by  a  tariff— How  has  it  been  possible  that  the  United 
States,  with  a  de  facto  double  standard  and  its  excess  of  media  of  circulation,  has  experi- 
enced as  great  or  greater  depreciation  of  prices  than  is  alleged  to  have  taken  place  in 
Europe  by  a  maintenance  of  the  gold  standard  ?  Is  i^  not  plain  that  a  phenomenal  dechne 
of  prices  in  two  parts  of  the  world,  with  entirely  different  monetarv  conditions,  must  have 
had  other  causes  than  a  demonetization  of  silver  m  the  United  States,  which  took  place  (it 
it  ever  did)  a  comparatively  short  time  ago  (repeal  of  Sherman  act  m  1893),  and  which  has 
not  prevented  nearly  $600,000,000  of  silver  credit  money  from  circulating  m  the  country  at 
its  full  nominal  value  ?  That  the  price  of  labor  measured  in  gold  has  not  declined  but  m 
creased  in  a  marked  degree  everywhere  in  the  civilized  world  during  the  last  quarter  ot  a 
century  has  been  already  commented  on.  Hence  if  the  purchasing  power  of  gold  has  in- 
creased during  this  period,  a  given  amount  of  it  would  have  purchased  more  labor  and  not 
less;  or,  what  is  the  same  thing,  wages  would  have  fallen,  which  they  have  not  done. 
Measured  by  the  price  of  labor,  gold  has  unquestionably  depreciated;  and  recent  careful 
examinations  indicate  that  the  ratio  of  its  dechne  has  been  from  100  m  1873  to  83  m  1893, 
Measured  also  by  the  decline  in  the  rate  of  interest  on  such  estabhshed  gold  paying  securi- 
ties as  British  consols,  the  ratio  has  been  from  100  in  1870  to  75  m  1896.  ^  Can  anybody 
suggest  a  better  measure  for  testing  this  issue?  .      u  il     >^^«o^/>  fh^ 

Has  any  one  ever  endeavored  to  explain  how  an  appreciation  of  gold  has  reduced  tne 
cost  of  railroad  and  water  transportation  to  the  extent  of  more  than  75  per  cent,  withm  the 
last  twenty  years,  although  the  wages  of  employes  have  notably  advanced  during  tne  same 
period?  If ,  on  the  other  hand,  these  reductions  were  caused  by  the  suppression  ot  tiie 
free  coinage  of  silver,  will  not  a  reversion  of  policy  enable  the  railroads  to  advance  their 
freight  rates  and  rob  the  people,  as  will  be  claimed,  by  exacting  50  per  cent,  more  than  at 
present?  And  will  not  some  supplementary  provisions  to  the  free  coinage  act  be  neces- 
sarv  to  prevent  their  so  doing  ? 

6 


TRUE  CAUSE  OF  THE  DECLINE  iA  PRICES. 

But  if  the  opinions  popularly  entertained  respecting  the  universal  decline  in  prices  are 
not  warranted,  the  question  next  naturally  arises :  What  has  been  the  true  cause  ?  All 
who  have  thoroughly  and  without  prejudice  studied  the  subject  are  agreed  that  it  is  to  be 
found  in  the  following  facts  :  That  man  within  the  last  thirty  or  forty  years  has  attained 
such  a  greater  control  over  the  forces  of  nature,  and  has  so  compassed  their  use,  that  he 
has  been  able  to  do  far  niore  work  in  a  given  time  and  produce  far  more  product,  measured 
by  quantity  in  ratio  to  given  amount  of  labor,  than  ever  before.  How  great  has  been  the 
average  increase  or  saving  in  the  world's  work  of  production  or  distribution  cannot  per- 
haps be  accurately  stated.  But  few  investigators  place  it  at  less  than  40  per  cent.,  and  in 
s6me  great  branches  of  industry  it  has  certainly  amounted  to  70  or  80  per  cent.  Taking  a 
majority  of  other  than  hand-made  commodities  into  consideration,  the  saving  of  labor 
within  the  last  thirty  years  has  probably  been  equal  to  at  least  40  per  cent,  in  produc- 
ing any  given  article.  We  have  here,  therefore,  a  natural,  sufficient  and  non-disputable 
cause  of  the  remarkable  decline  in  prices  under  consideration,  and  also  for  the  continuance 
of  such  decline  ;  for  prices  are  still  falling,  and  the  only  assignable  and  probable  reason  why 
the  decline  experienced  has  not  been  greater  is,  that  decreased  cost  has  occasioned  in- 
creased demand  and  consumption,  which  to  a  considerable  extent  has  antagonized  the 
natural  tendency  to  decline. 

This  decline  in  prices  admits  of  many  examples  of  complete  demonstration  and  illus- 
tration in  respect  to  cause  ;  namely,  increased  production  by  reason  of  improved  methods 
or  new  conditions,  which  have  resulted  in  decreased  cost,  a  supply  in  excess  of  current 
market  demand,  and  continuous  decline  in  market  prices.  In  other  words,  the  price  of  any 
commodity  is  fixed  simply  and  solely  by  the  proportion  of  such  articles  as  are  produced  and 
consumed,  and  prices  cannot  be  and  are  not  fixed  in  any  other  way. 

Take,  first,  the  market  decline  in  the  price  of  wheat,  which  typifies  more  than  any 
other  one  product  the  grievance  of  the  American  farmer.  The  cause  of  this  decline  is  the 
indisputable  fact  that  more  wheat  has  been,  and  is  still  produced,  not,  perhaps,  more  than 
the  world  wants,  but  more  than  it  is  willing  to  buy.  The  average  annual  wheat  crop  of 
the  United  States  m  the  four  years,  1869-72,  was  244,187,000  bushels.  Since  1890  the 
average  crop  has  been  about  570,000,000  bushels.  In  1873  there  was  practically  no  wheat 
exported  from  India.  In  1892  India  exported  56,566,000  bushels.  In  1889  the  Argentine 
States  of  South  America  were  not  named  as  a  factor  to  the  smallest  extent  in  the  world's 
wheat  supply.  To-day  they  are  among  its  greatest  sources  of  supply,  and  of  their  surplus 
product  exported  in  1894  60,000,000  bushels.  A  few  years  ago  there  were  but  few  reapers 
and  harvesters  for  wheat  in  Russia,  and  hardly  a  grain  elevator  in  connection  with  stor- 
age and  delivery  buildings.  To-day  Russia  is  rapidly  introducing  improved  agricultural 
machinery,  with  the  result  that  its  annual  wheat  product  has  increased  from  168,545,000 
bushels  in  1891  to  300,000,000  in  1894.  There  has  also  been  a  very  marked  increase  in 
recent  years  in  the  wheat  crops  of  Austria-Hungary  and  of  Spain.  It  is  impossible,  there- 
fore, to  resist  the  conclusion  that  the  production  of  wheat  in  the  world  has  been  increas- 
ing much  faster  than  the  necessities  of  the  world's  wheat-eaters  ;  and  that  the  increased 
production  has  been  in  the  countries  where  wheat  is  produced  at  the  least  cost.  In  addi- 
tion to  these  conditions,  we  have  now  the  announcement  that  the  surplus  of  agricultural 
products  in  Austraha  available  for  export,  is  in  excess  of  the  demands  of  the  people  of 
the  United  Kingdom  for  consumption. 

The  increase  in  the  average  of  the  annual  cotton  crop  in  the  United  States  in  the 
years  from  1871-72  to  1889-90  was  more  than  100  per  cent.,  while  the  increase  in  the  popula- 
tion of  the  country  during  the  same  period  was  about  56  per  cent.  During  the  same  period 
it  is  certain  that  the  world's  consumption  of  cotton  did  not  keep  up  its  own  production. 
The  legitimate  sequel  of  this  has  been  that  midland  cotton  that  sold  in  iSSo  for  11. 5  cents 
per  pound,  sells  now  (August,  1896)  for  7>^  cents. 

A  UNIVERSAL  DECLINE. 

Similar  illustrations  of  what  has  happened  to  the  world's  products  might  be  multiplied 
to  almost  any  extent  ;  but  space  will  admit  of  but  few  additional  citations.  In  1858  the 
metal  aluminum  sold  for  $90  per  pound.  Its  present  market  value  is  less  than  50  cents. 
Copper  kettles  which  sold  in  i86o  for  $2. 50 can  now  be  bought  for  75  cents,  and  this  home- 
ly example  illustrates  the  great  decline  which  has  taken  place  in  the  price  of  copper  since 

7 


i860,  1.  e.,  from  25  cents  to  10  and  11  cents  in  1896,  which  has  bean  mamly  due  to  the  f-x- 
traordmary  jjroductiveness  of  American  mines  and  new  methods  of  mining  and  smeltine 
Pig  iron  sold  for  $50  per  ton  in  1873.  The  same  grade  can  now  be  bought  for  $11.  Be- 
tween 1873  and  1892  the  increase  in  the  production  of  pig  iron  in  the  United  States  was 
342  per  cent.  Recognized  authorities  state  that  since  1890  the  world's  wool  clip  has  ib- 
creased  155  per  cent.  Careful  analysis  has  shown  that  the  decrease  in  price  m  recent  years 
of  the  four  great  raw  materials  of  the  world's  industries— iron,  wheat,  cotton  and  wool— in 
consequence  of  over-supply  of  each  of  them  in  excess  of  current  demand,  has  materially 
affected  the  market  price  of  products  (m  the  w^ay  of  decline)  whose  average  annual  value 
is  not  less  than  2,000,000,000  of  gold  dollars. 

Again,  the  price  of  money,  representing  capital,  has  continually  dechned  since  187 1  iB 
all  gold-standard  countries,  in  almost  as  great  a  degree  as  agricultural  or  manufactured 
products,  and  to  the  great  detriment  of  a  large  number  of  good  people  who  own  a  small 
capital  invested  in  securities,  besides  carrying  on  some  business  or  profession,  and  on  the 
combined  incomes  from  which  they  depend  for  a  living. 

In  1877  an  investment  of  $10,000  could  be  rehed  upon  for  an  annual  income  of  $600. 
To-day  the  same  amount  of  money,  invested  wdth  equal  security,  cannot  be  made  to  yield 
more  than  $400  per  annum.  And  for  this  result,  which  may  be  fairly  regarded  m  the  light 
■of  a  depreciation  of  all  property,  the  conceded  increase  m  the  amount  of  the  world's  capital 
seeking  investment  is  clearly  accountable.  In  contravention  of  this  conclusion,  it  is 
asserted  that  "  money  cannot  command  as  big  interest  as  formerly,  as  borrowers  are  top 
poor  in  collateral  to  bid  for  it.  "  But  the  fact  is,  that  the  rates  of  interest  are  lowest  in 
those  countries— like  England  and  France— where  good  collaterals  are  most  abundant. 

Land  unquestionably  in  recent  years  has  also  declined  in  value,  due  in  a  certain  and 
correct  sense  to  overproduction.  The  fixed  acreage  of  the  United  States  has  not  increased; 
but  the  tillable  acreage  has  been  enormously  enlarged.  Every  railroad  that  has  been  built 
at  the  West  has  brought  millions  of  acres  in  competition  with  the  lands  of  the  older  States 
and  of  other  countries.  It  is  the  competitive  supply  of  cereal  and  animal  products  of 
the  American  farmer  that  has  lowered  the  price  of  land  and  nearly  starved  the  Enghsh 
agriculturist. 

HOW  PRACTICAL  BUSINESS  MEN  REASON  ABOUl  THE  SITUATION. 

It  is  most  interesting  and  instructive  in  this  connection  to  note  how  business  men 
generally  throughout  the  world,  though  not  given  to  much  reading  of  economic  or  fiscal 
treatises,  have  inflfeinctively,  as  it  were,  recognized  the  axiom  that  the  price  of  any  article 
or  commodity  is  fixed  simply  and  solely  by  the  quantity  proportions  of  such  articles 
produced  and  consumed.  Or,  in  other  words,  by  supply  and  demand  ;  and  have  endeav- 
ored to  regulate  their  material  interests  m  accordance  with  it.  Of  recent  illustrations  of 
this  the  foUowmg  are  most  instructive  : 

The  business  of  manufacturing  whiskey  in  the  United  States  has  for  some  time  past 
been  in  a  most  deplorable  condition  ;  and  the  average  of  its  market-price,  exclusive  of 
taxes,  has  been. reported  as  below  the  cost  of  production.  There  is  no  difference  of  opinion 
on  the  part  of  distillers  that  the  sole  cause  of  this  state  of  things  is  an  overproduction  of 
whiskey  ;  and  that  there  can  be  no  possible  improvement  in  their  business  until  the  present 
surplus  stock,  amounting  to  many  millions  of  gallons  in  the  United  States  bonded  ware- 
houses, has  passed  into  consumption,  which  will  require  a  period  of  many  months.  Under 
such  circumstances  what  have  the  American  distillers  decided  to  do  ?  To  obtain  relief  from 
some  radical  change  m  the  coinage  and  use  of  silver  ?  The  idea  does  not  seem  to  have  been 
even  so  much  as  thought  of  ;  but  all  are  of  one  mmd,  that  it  was  expedient  to  entirelv 
suspend  distilling  for  a  lengthened  period— at  least  eighteen  months  ;  and  it  was  claimed 
that  unless  this  was  done  the  present  low  market  price  of  existing  stocks  would  continue  to 
depreciate.  And  in  accordance  with  this  view  of  the  situation  nearly  all  the  large  distillers 
in  the  United  States  have  suspended  operations. 

In  like  manner  the  cotton  manufacturers  of  the  United  States,  recognizing  that  an 
accumulation  of  many  millions  of  unsold  yards  of  their  fabrics  was  depressing  the  market 
price  of  the  same  below  the  cost  of  production,  have,  within  a  recent  period,  largely 
suspended  their  production.  , 

Bicycles  can  be  bought  for  about  one-half  the  price  that  was  charged  for  them  a  year 
ago.  Can  anybody  doubt  that  such  a  result  has  been  due  to  a  glutted  market  ?  Does 
anybody  think  that  former  prices  can  be  restored  by  increasing  our  currency  ? 

Ask  an  Indian  or  Chinese  merchant  if  the  great  dechne  which  has  taken  place  m 
recent  years  in  the  price  of  opium  has  been  occasioned  by  any  change  in  the  money  with 
which  It  IS  bought  and  sold  ;  and  if  his  natural  politeness  did  not  prevent,  he  would  laugh 
m  your  face,  and  tell  you  that  it  was  due  to  the  circumstance  that  the  Chinese  had  gone 
into  the  business  and  were  producing  nearly  all  the  opium  they  required  for  themselves. 

8 


:  Tke  American  wheat-grower  may  as  well  recognize  first  as  last  that  the  prices  of 
wheat  will  not  advance  anywhere  in  the  world  unless  there  is  substantially  a  complete 
failure  in  the  crop  of  one  or  more  of  the  great  wheat-producing  countries.  To  represent 
to  him  that  he  is  likely  to  obtain  an  increased  price  for  his  wheat  by  any  change  in  the 
currency  of  his  country  is  simply  speculative  nonsense.  Senator  Stewart  hit  it  exactly 
when  he  told  the  American  farmers  in  1874,  "  Your  wheat  will  be  measured  by  the  same 
standard — gold— in  Illinois  as  it  is  in  Liverpool,  and  any  man  can  figure  it.  It  is  idle  to 
talk  about  compromising  on  any  other  measure  of  value  ;  the  world  will  not  accept  it."  If 
he  produces,  as  he  does,  an  amount  in  excess  of  domestic  consumption,  the  surplus  must 
be  sold  abroad,  or  not  sold  at  all.  It  not  sold  out  of  the  country  and  allowed  to  remain  at 
home,  the  producer  of  wheat  will  be  smothered,  as  it  were,  in  his  own  grease.  The  use  of 
a  debased  currency  as  a  medium  of  domestic  exchange  may  augment  the  nominal  price  of 
wheat  m  the  United  States,  but  not  the  price  for  which  its  producer  sells  his  surplus 
abroad,  which  fixes  the  price  for  the  whole  crop.  If  he  imagines  tor  one  moment  that  he 
is  se'mg  to  be  richer  for  thus  marking  up  its  domestic  price,  he  will  be  in  the  same  box  as 
tlic  Scotch  storekeeper  ^vho  made  himself  wealthy  by  adding  up  the  year  of  Our  Lord  la 
his  estimate  of  annual  profit. 

SOMETHING  THAT  THE  WORLD  HAS  NOT  YET  FULLY  REALIZED. 

The  fact  of  it  is  that  the  world  is  confronted  with  the  most  remarkable  phenomenon  that 
has  ever  characterized  its  civilization,  and  has  not  yet  fully  recognized  its  importance,  the 
least  so,  apparently ,  in  the  United  States.  A  phenomenon  sequential  and  m  harmony 
with  the  assertion  recently  made  by  the  eminent  French  chemist  and  economist,  M.  Ber- 
thelot.  m  an  address  before  an  association  of  European  scientists,  that  practically  more  has 
been  done  lor  the  development  of  mah  during  the  last  three-quarters  of  a  century  than 
during  the  preceding  6,000  years.  President  Andrews,  of  Brown  University,  who  regards 
free  coinage  m  the  light  of  a  panecea  for  all  evils,  has  caught  glimsesof  the  situation  when 
he  expresses  the  opinion  that  ■  The  money  question  at  the  present  time  is  the  greatest 
question  of  civihzation. "  But  he  has  not .  sense  enough  to  distinguish  an  effect  from  a 
cause,  and  so  takes  rank  with  an  untutored  Indian,  who  connects  the  death  of  his  chief 
with  an  eclipse  of  the  moon.  Mr.  McKinley,  in  his  letter  of  acceptance,  approximates  to 
a  clearer  view  when  he  says  :  '*  There  is  nothing  connected  with  our  money  to  account 
for  this  sudden  aggravated  industrial  change." 

There  is,  however,  no  mystery  involved  in  this  strange  state  of  things.  Its  cause  can 
be  definitely  traced,  but  the  full  sphere  of  its  ultimate  influence,  although  our  recent  ex- 
perience is  large  and  impressive,  cannot  as  yet  be  predicted.  If  the  ultimate  result  as 
seems  likely,  is  to  be  that  mankind  in  general  is  to  obtain  a  larger  share  of  the  essentials 
of  a  good  livelihood  with  much  less  of  physical  effort,  it  cannot  be  other  than  immensely 
beneficial.  But  the  transition  period,  still  in  progress,  will  surely  be,  as  it  already  has  been, 
disastrous  to  many  interests.  If  the  labor  of  one  man  will  produce  as  much  of  a  commodi- 
ty in  a  given  time  as  formerly  required  the  labor  of  two  or  more  men,  then  it  is  clear  that 
the  sphere  of  opportunity  to  labor  has  been  greatly  contracted.  And  that  is  exactly  what 
has  taken  place  The  bad  results  of  this  have,  to  a  certain  extent,  been  obviated  by  the 
increased  demand  for  many  new  articles — especially  of  the  artistic  order  ;  many  new 
industrial  appliances,  higher  grades  of  fabrics,  larger  consumption  of  certain  commodibes 
— as  fruit — consequent  on  cheap  and  rapid  transportation  and  the  like.  But  there  is  no 
certainty  how  long  these  remedial  influences  will  continue.  Any  man  earning  fair  wages 
in  any  industrial  employment  will,  therefore,  if  he  understands  his  own  interests,  hesitate 
about  demanding  higher  wages,  or  vacating  his  situation  at  the  demand  of  some  *'  walking 
delegate,"  when  other  men  are  waiting  and  anxious  to  take  every  place  vacated.  In  coi^ 
iormity  with  this  view,  we  have  the  established  fact  that  the  percentage  of  strikes  won 
during  the  last  ten  years — 1885-95— has  steadily  decreased. 

THE  CRUCIFIXION  OF  LABOR. 

If  labor  has  been  crucified  in  recent  years,  it  is  labor  that  has  done  it .'  If  a  crown  of 
thorns  has  been  placed  upon  its  brow,  it  is  the  hand  of  labor  that  has  woven  and  placed  it 
there.  The  metaphoncal  figure  ot  a  gold  cross,  although  fanciful  and  stimulative  to  the 
imagination,  is  not  warranted  by  any  analogy  or  semblance  of  a  reality.  It  finds  its  closest 

9 


antetype  m  a  Chinese  idea  that  there  is  something  supernatural  behind  every  evii,  in  t^e 
nature  of  a  dragon,  that  can  only  be  scared  away  by  loud  halloaing  and  the  beating  of  tom- 
toms. Its  popular  acceptance  as  a  symbolism  of  reality  fortifies  the  remark  of  that  prince 
of  showmen,  the  late  P.  T.  Bamum,  "  that  the  American  people  like  nothing  better  than  to 
be  adroitly  humbugged."  If  labor,  typified  by  all  the  material  forces  of  nature  (as  it 
shoul,d  be),  is  a  giant,  and  has  been  crucified,  the  cross  upon  which  it  has  been  extended 
must  be  also  gigantic.  Consider  the  materials  that  have  entered  into  its  construction. 
For  the  foundation  take  first  the  Bessemer  steel  rail,  which,  reduced  in  price  from  $158  per 
ton  in  1868  to  $18  in  1895,  has  mainly  enabled  the  Pennsylvania  Railroad  to  reduce  its  cost  of 
transporting  freight  from  3.76  cents  per  ton  per  mile  to  about  half  a  cent  per  mile,  thereby 
greatly  helping  to  increase  and  cheapen  the  area  of  land  available  for  agricultural  produc- 
tion and  competition.  On  this  place  blocks  of  granite  and  marble  cut  with  machinery, 
almost  as  readily  and  cheaply  as  wood  is  cut  by  a  knife,  thereby  economizing  more  labor. 
For  the  superstructure  place  the  agricultural  machinery,  which  has  made  the  labor  of  one 
man  on  the  great  wheat  fields  of  Dakota  equal  to  5,000  bushels  of  wheat ;  then  the  ma- 
chinery for  excavating  soil  and  blasting  rock,  >which  has  displaced  more  than  30  per  cent,  of 
former  labor  ;  then  the  machinery  for  the  manufacture  of  boots  and  shoes,  which  has  dis- 
placed labor  in  important  departments  to  the  extent  of  80  per  cent,;  then  the  improved  cot- 
ton machinery,  by  which  the  labor  of  one  man  can  fully  clothe  1,600  Chinamen  ;  then  the 
sewing-machine,  the  steam  drill,  the  typesetting  machine  which  has  thrown  thousands  of 
printers  out  of  their  accustomed  vocation  ;  then  the  machinery  for  the  manufacture  of  wall 
paper,  where  the  displacement  of  labor  in  proportion  to  production  is  stated  to  have  been 
m  the  ratio  of  one  hundred  men  to  one  man.  And  in  like  manner  the  construction  of  the 
cross  on  which  labor  has  been  crucified  can  be  indefinitely  extended.  Does  anybody  now 
desire  to  tear  down  and  demolish  this  cross  ?  If  it  can  be  done,  there  is  no  question  that 
opportunities  for  employment  will  be  greatly  increased.  Can  it,  however,  be  done  ?  Can 
it  be  done  by  any  legislation  respecting  the  use  of  the  metal  silver  as  a  medium  of  ex- 
change ?  If  it  can,  then  the  feat  will  find  its  only  miraculous  parallel  and  antetype  in  the 
throwing  down  of  the  walls  of  Jericho  by  the  blowing  of  rams'  horns.  If  it  can,  the  result 
will  be  a  turning  back  of  the  world's  recent  record  of  civilization. 

ORIGIN  OF  THE  SILVER  CRAZE  IN  THE  UNITED  STATES. 

It  is  desirable  at  this  point  to  go  back  and  trace  out  the  origin  of  the  present  remark- 
able excitement  in  the  United  States  about  silver.  The  one  man  more  responsible  for  it 
than  any  other  is  Mr.  John  P.  Jones,  present  United  States  Senator  from  Nevada,  by  birth 
one  of  that  race  (Britishers)  to  which  popular  opinion  in  the  United  States  is  wont  to 
attribute  everything  hostile  to  this  country  ;  a  man,  however,  of  unquestionably  great 
ability.  At  his  first  entrance  into  public  life,  in  1873,  Mr.  Jones,  with  his  present  colleague, 
Senator  Stewart,  was  an  uncompromising  friend  of  the  gold  standard,  and  declaimed  in 
the  Senate  in  favor  of  gold,  as  "  the  custodian  of  commerce,"  "  the  most  potent  agent  of 
commerce,"  "  common  denominator  of  values."  He  also 'claimed  and  was  probably  en- 
titled to  the  credit  of  having  been  mainly  influential  in  inducing  President  Grant  to  veto 
in  1874  a  bill  for  the  inflation  of  greenbacks  ;  and  spoke  of  having  made  the  necessity  of  so 
doing  to  the  President  "  as  plain  as  a  goat's  tail  going  up  a  hill."  In  a  debate  in  Congress 
in  1874  Senator  Stewart  said  : 

"I  do  not  care  how  much  you  discuss  it,  or  how  many  resolutions  you  pass,  they  do  not 
make  any  difference  ;  you  must  come  to  the  same  conclusion  that  all  other  people  have — 
that  gold  is  recognized  as  the  universal  standard  of  value.  It  is  the  measure  that  must  be 
used.  It  is  the  measure  by  which  wealth  must  be  tested  ;  and  whether  it  be  pennies  or 
millions  matters  not,  it  is  the  measure  that  must  test  all  wealth." 

About  the  same  time  these  gentlemen,  in  connection  with  the  other  Pacific  Coast 
Senators,  passed  an  amendment  in  the  Senate  making  gold  coinage  free.  Mr.  Jones  was 
also  at  the  time  an  ultra  free-trader,  and  more  than  once  bantered  the  writer  with  not 
being  sufficiently  progressive  in  this  direction.  Subsequently  Mr.  Jones  experienced  a 
change  of  heart,  and  became— as  did  Senator  Stewart — an  opponent  of  the  gold  standard 
and  an  ultra  protectionist.  How  was  this  remarkable  change  of  sentiment  to  be  accounted 
for  ?  Men  of  brains  and  education  who  have  adopted  creeds  in  religion  or  opinions  in 
economic  matters  on  principle,  do  not  all  at  once  completely  reverse  their  opinions  and 
adopt  those  diametrically  opposite  without  some  powerful  motives. 

10 


The  explanation  in  the  case  of  Mi.  Jones  and  his  business  associates  does  not  seem  to 
^e  attended  with  any  difficulty.  They  had  become  largely  interested  in  the  mineral 
resources  of  their  State,  especially  silver  mining,  and  were  reported  to  have  accumulated 
great  wealth  from  their  investments.  As  a  shrewd  business  man,  he  naturaUy  looked  out 
sharply  for  his  business  interests.  He  early  saw,  what  others  failed  so  promptly  to  see, 
that  the  production  of  silver  in  the  world — and  especially  in  the  United  States— through 
improved  methods  of  mining,  refining  and  transportation  of  ores,  was  rapidly  increasing. 
He  doubtless  foresaw  what  the  world  now  knows,  that  the  world's  product  of  silver,  which 
was  6i,ocx),ooo  ounces  in  1873.  would  become  165.0^0,000  ounces  in-  1895  ;  that  its  market 
value  of  $1.30  per  ounce  in  1873  (reckoned  in  gold)  would  dwindle  to  65  cents  in  1895.  What 
it  now  costs  to  produce  silver  no  one  accurately  knows.  The  celebrated  "Broken  Hill" 
mines  of  Austraha  yielded  last  year— 1895 — over  10,000,000  ounces  of  silver  at  a  total  re- 
ported cost  of  about  40  cents  per  ounce  ;  and  good  authorities  report  that  some  of  the 
American  mines  turn  out  millions  of  ounces  at  the  present  time  at  an  equally  low  figure. 
With  such  an  aspect  of  the  future,  it  did  not  require  any  great  measure  of  business 
sagacity  on  the  part  of  Mr.  Jones  and  his  silver-mining  associates  to  foresee  that  this  pros- 
pective great  increase  m  the  production  of  silver  would  impair  its  market  or  bullion  value, 
and  diminish  the  profits  of  mining,  and  that  something  must  be  done  to  avert  such  a  con- 
tingency. As  the  world  had  then,  as  it  has  now,  a  sufficient  supply  of  all  the  silver  it  needed 
m  the  arts  or  as  an  instrumentality  of  exchange,  any  attempt  to  make  its  use  more  exten- 
sive did  not  seem  feasible.  An  imposition  of  heavy  protective  duties  on  the  import  of 
silver  was  also  not  available,  because  the  country  was  an  exporter  rather  than  an  importer 
of  silver. 

A  CLEVER  SCHEME. 

They  accordingly  hit  upon  the  following  ingenious  plan— that  the  Treasury  of  the 
United  States  should  be  required  to  buy  so  much  of  the  surplus  produced  by  the  mines  of 
Mr.  Jones  and  his  associates  as  would  tend  to  maintain  the  price  of  silver  and  consequently 
their  enormous  profits,  or  at  least  prevent  any  further  decline  in  them.  They  therefore 
induced  Congress  to  require  the  Government  to  buy  at  least  two  million  dollars  ($2,000,000) 
worth  of  silver  bullion  each  and  every  month,  the  total  production  of  all  the  silver  mines  in 
the  United  States  being  at  that  time  about  three  millions  per  month.  The  Government 
consequently  at  once  made  a  market  for  about  two- thirds  of  all  the  product  of  this  industry, 
and  under  this  act  the  Treasury  did  buy  $378,165,000.  This  device  to  keep  up  the  price  of 
silver  did  not,  however,  work  as  its  originators  expected  it  would  at  the  time  it  was  put 
into  operation,  and  for  the  reason  that  the  world's  annual  output  at  the  time  of  its  enact- 
ment— namely,  73,476,000  ounces,  with  an  average  value  of  1.152  per  ounce,  had  reached 
120,213,000  ounces  per  annum  in  1889,  while  its  price  had  fallen  to  .93  per  ounce.  The 
device  was  accordingly  reconstructed,  and  in  1890  the  United  States  Treasury  was  required 
to  buy  4,590,000  ounces  per  month,  and  under  this  law,  which  was  repealed  in  1893,  the 
Government  purchased  168,647,682  fine  ounces  of  silver  at  a  cost  of  $155,030,000.  In  virtue 
of  these  two  acts  the  United  States  Treasury  purchased  496,984,889  fine  ounces  of  silver  at 
an  expenditure  of  $508,993,974,  and  of  this  large  amount  $513,000,000  remained  m  the  vaults 
of  the  Treasury  on  the  ist  of  September,  1896,  entailing  a  burden  of  taxation  on  the  people 
of  the  United  States  of  at  least  $15,000,000  per  annum,  to  say  nothing  of  the  loss  on  its 
purchase-price  if  the  vaults  of  the  Treasury  should  be  opened  and  its  store  of  silver  be 
allowed  to  flow  out  for  sale  at  current  bullion  prices  (which  might  be  as  low  as  25  cents  in 
gold)  per  ounce. 

The  attention  of  the  people  of  the  United  States  has  not  been  sufficiently  directed  to 
the  character  of  these  measures.  They  were  indisputably  an  application  of  the  protective 
principle  in  a  most  offensive,  costly  and  unpractical  form;  one  which  no  intelligent  advo- 
cate of  protection  would  countenance.  It  was  an  interference  with  the  principle  of  indus- 
trial freedom  that  no  civilized  nation,  not  sanctioning  human  slavery,  has  ever  attempted 
to  exercise.  It  was  an  unprecedented  departure  of  the  Government  from  the  sphere  of 
purpose  for  which  it  was  instituted,  namely,  by  buying  an«  I  withholding  from  the  market  the 
largest  portion  ot  the  product  of  one  industry,  with  the  object  of  increasing  the  price  of  its 
unsold  remainder  to  a  multitude  of  consumers  and  enchancing  the  profits  to  a  small  num- 
ber of  producers.  And  yet  those  former  distinguished  advocates  of  free  trade,  Messrs. 
Vest,  Jones  (of  Arkansas),  Blackburn  and  Mills,  have  walked  into  the  trap  and  closed  de- 
hberately  forever  (it  is  to  be  hoped)  the  door  after  them.  For  no  audience  of  American 
citizens  who  are  free  traders  from  principle  ought  ever  hereafter  to  give  to  any  one  of 
them  a  respectful  hearing. 

II 


If  the  principle  of  the  purchase  and  hoarding  of  a  portion  of  the  industrial  produce  of 
Ijbe  country  with  a  view  to  raising  its  price  and  so  benefiting  its  producers  is  correct,  why 
was  it  only  made  applicable  to  the  comparatively  small  but  notoriously  profitable  industry 
•f  silver  mining,  the  managers  of  which  are  reported  to  be  millionaires?  Why  is  it  not 
made  applicable  to  other  commodities,  the  producers  of  which  had  far  greater  claims  for 
National  consideration  than  silver — cotton  and  wheat  for  example,  in  comparison  with  the 
annual  production  of  which  that  of  silver  is  insignificant.  A  small  rise  in  the  price  of  these 
commodities  or  even  a  guarantee  against  the  unusual  decline  in  their  prices ,  would  have 
benefited  a  much  larger  number  of  needy  producers.  Copper  leads  silver  in  the  value  of 
its  annual  product  by  about  seven  millions;  building  stone  by  four  millions,  coal  by  over 
•ne  hundred  millions;  while  potatoes,  which  have  recently  hardly  commanded  a  price  suffi- 
cient to  pay  for  digging,  exceed  silver  in  the  value  of  their  annual  production  by  more 
than  ten  millions.  The  Government  in  days  past  has  done  a  great  deal  to  maintain  the  do- 
mestic prices  of  pig-iron,  the  annual  product  of  which  is  worth  very  much  more  than  onr 
domestic  product  of  silver;  but  the  advocates  of  protection  neyer  proposed  to  buy  pigs  ot 
iron  and  stack  them  up  unused  in  the  vaults  of  the  Treasury  for  the  sake  of  benefiting  the 
iron  industry.  The  entire  market  value  of  the  silver  product  of  the  country  is  not  sufific- 
i«nt  to  pay  the  legal  interest  on  the  total  valne  of  its  other  mineral  products. 

QUESTION  AND  ANSWER. 

When  the  question  was  familiarly  put  by  the  writer  to  Senator  Jones,  shortly  after  his 
remarkable  economic  conversion,  why  he  had  changed  from  an  ultra-free-trader  to  an 
ttltra-protectionist,  his  answer  was :  "  Don't  you  see  it,  David?  How  could  I  ask  the  Gov- 
ernment to  regularly  purchase  our  product  of  silver  and  refuse  to  give  the  iron  manufacturer 
in  Pennsylvania  the  tariff  protection  which  he  needs  to  maintain  his  prices?  Let  Congress 
discontinue  the  purchase  of  our  silver  and  you  vi^ill  see  how  ultra  a  free-trader  I  wnll  soon 
again  become."  And  the  threat  is  evidently  in  the  process  of  consummation,  when  the 
advocates  of  free  coinage  in  the  Senate — including  Senator  Jones — announce  that  no 
revision  of  the  tariff  in  the  interest  of  protection  shall  pass  Congress  which  does  not 
provide  for  free  coinage  of  silver. 

The  above  two  devices  for  the  benefit  of  the  millionaire  mine  owners  having  com- 
pletely failed,  they  have  now  devised  a  third,  more  subtle  and  ingenious,  which  has  captiv- 
ated and  beguiled  no  small  part  of  the  American  people — namely,  the  so-cahed  free  coinage 
of  silver,  with  the  legal-tender  attachment.  Under  such  a  policy — once  adopted— =they  could 
force  the  public  to  buy,  at  an  artificial  and  extravagant  price,  not  a  part,  but  the  whole  of 
their  annual  product  of  silver.  For  they  could  take  it— costing  30  or  40  cents  per  ounce— 
to  the  mint  and  have  it  coined,  and  then  virtually  sell  the  resulting  coin  to  the  pubhc  at  the 
rate  of  10  o  cents  per  ounce  for  the  liquidation  of  debts  and  the  payment  of  wages. 

It  is  difficult,  therefore,  in  the  face  of  such  indisputable  facts,  to  resist  the  conclusion 
that  this  whole  silver  agitation,  which,  as  before  shown,  is  not  manifesting  itself  in  any 
like  degree  in  any  other  country,  is  the  result  of  a  rascally  conspiracy  of  the  silver-mini ng 
magnates  of  the  West  and  certain  politicians  whose  aspirations  are  centred  in  the  attain- 
ment of  office  and  spoils.  The  exactions  of  the  former  further  to  increase  their  great 
fortunes  have  already  cost  the  Government  and  the  people  of  the  United  States  thousands 
of  millions  of  dollars.  If  no  silver  mines  had  ever  been  discovered  m  this  country,  or,  it 
discovered,  the  Government  had  bought  and  closed  them  up,  there  never  would  have  been 
any  silver  agitation  in  the  country.  ,     /v  •  a        *.- 

Have  there  ever  been  such  selfish  and  unpatriotic  schemes  palmed  oft  in  modern  time 
on  the  people  of  any  country  ?  Ought  not  every  sensible  American  citizen  that  has  givei 
or  is  still  giving,  aid  and  countenance  to  such  a  scheme,  to  blush  for  the  disgrace  and  los 
which  it  has  entailed  upon  his  beloved  country  and  its  Government? 

THE    GREAT    AND    ALL-IMPORTANT    QUESTION    BEFORE    THE 

COUNTRY. 

The  great  and  all-important  question  at  present  before  the  country  is  not  what  shall  be 
done  with  silver,  the  craze  concerning  which  has  been  founded  on  a  wicked  and  selfish 
device  of  the  American  silver  mine  owners,  and  which  finds  no  parallel  in  history  except  the 
"  George  Law  "  scheme  in  France  m  1716,  which  proposed  to  enrich  everybody  by  the  issue 

12 


•f  paper  currency  based  on  the  predicated  profits  of  a  company  for  trading  with  the  East 
and  West  Indies,  and  which  resulted  in  immense  losses  to  the  people  of  France  and  a  com- 
plete wrecking  of  the  finances  of  the  State.  It  is  not  the  appreciation  of  gold  ;  it  is  not 
bimetallism  and  international  conferences  and  agreements  on  the  subject,  which  are  less 
likely  than  ever  to  take  place,  because  the  world  is  beginning  to  recognize  that  its  mer- 
chants will  never  accord,  except  to  a  most  limited  extent,  to  the  money  metals  any  basis 
for  exchange  other  than  the  market  price  of  the  bullion  they  contain  ;  and  also  because 
the  trade  and  commerce  of  the  world  is  increasing,  is  likely  to  continue  to  increase,  and  is 
now  greater  than  ever  before  without  the  so-called  bimetallism.  It  is  how  shall  the  people 
of  the  United  States  find  a  market  for  the  surplus  products  of  their  industries,  which  sur- 
plus, through  their  ingenuity,  and  natural  resources,  is  comparatively  larger  than  in  any 
other  country,  and  is  sure  to  increase.  The  surplus  must  be  sold  abroad,  or  not  sold  at  all. 
Three-fourths  of  such  surplus  is  the  product  of  the  farm,  of  which  $628,000,000  (gold  valua- 
tion) was  sold  in  foreign  markets  in  1894.  No  increase  of  protective  duties  on  gram, 
cotton,  meats  and  the  like  will  appreciably  help  the  American  farmer,  and  their  adoption 
elsewhere  can  only  hurt  him.     The  American  producers — especially  the  American  farmer 

must  be  prepared  to  meet  the  competitive  prices  of  the  producers  of  other  countries  or 

'■o  out  of  international  business.  The  first  step  in  the  way  of  improving  the  business 
condition  of  the  country  is  to  discover  and  remove  all  artificial  obstacles  which  obstruct 
trade  which  it  is  in  the  power  of  legislation  to  deal  with  and  remove. 

AN  HONEST  FREE  COINAGE  ARRANGEMENT. 

The  greatest  obstacle  at  present  in  the  way  of  business  betterment  is  the  position  of 
silver  and  its  assumed  relation  to  prices  and  the  currency;  and  this  of  all  obstacles  is  the 
easiest  to  remove  if  the  American  people  will  only  trust  to  their  common-sense  and  aban- 
don unwarranted  prejudices.      But  how  ?      Answer  :    By  free  coinage  of  -both  gold  and 
silver.     What  then,  it  may  be  asked,  do  you  propose  as  a  remedy,  more  of  the  hair  of  the 
same  dog  that  has   bitten   us  ?    Yes  and  no.     Let  it  be  lawful  for  every  one  to  bring  any 
amount  of  gold  or  silver  to  the  mints.     Let  them,  at  reimbursement  of  the   slight  expense 
of  coining,  be  put  in  the  form  of  existing  coins.     Let  each  com  bear  on  its  face  the  Govern- 
ment certificate  of  its  true  weight  and  fineness.     Then  each  would  circulate   and  be  full 
payment  when   tendered  in   settlement  of  purchases,  debts  and  contracts,  at  its  market 
value.     What  more  can  be  rightfully  asked  ?    What  would  be  the  condition  of  the  world's 
business  if  it  were  attempted  to  transact  it  on  any  other  basis  ?    If  silver  has  been  demon- 
etized it  will  be  remonetized  and  have  every  privilege  extended  to  it  that  has  ever  been 
given  to  gold.     If  more  than  the  existing  amount  of  silver  at  any  one  time  in  circulation  is 
needed,  it  can  be  speedily  increased  to  any  extent  without  further  action  of  the  Government. 
But  this  proposition  is  not  likely  to  be  accepted,  and  the  demand  will  be  that  each 
coin  issued  by  the  Government  shall  have  attached  to  it  the  legal-tender  quality.     But  let 
every  intelligent  American  citizen,  before  he  gives  final  judgment  on  this  point,  acquaint 
himself  fully  with  the  meaning  of  legal-tender.     Going  back  to  the  Middle  Ages,  we  find 
it  had  its  origin  with  the  early  English  and  French  kings,  who  debased  their  coins  of  gold 
and  silver,  and  then,  in  order  to  compel  their  unwilling  subjects  to  take  them  at  an  artificial 
and  wrongful  value  and  thus  rob  them,  attached  the  legal-tender  quality.     Thus,  bom  in 
fraud    it  has  continued,  with  very  few   exceptions,  to  be  a  fraud  ;    and  any  man  who 
advocates  the  retention  of  the  legal- tender  quality  to  enforce  the  circulation  of  money  and 
its  use  in  the  payment  of  debts  in  a  ratio  less  than  its  market  or  true  value,  makes  himself 
a  partv  to  fraud.     The  only  exception  to  its   fraudulent  use  is  a  proper    provision   of  law, 
that  when  in  buying  and  selling  commodities  or  services,  no  stipulation  has  been  made  m 
resTject  to  payments,  the  Government  may  property   name,    for   the  purpose    of  avoiding 
disputes,  something  which  shall  be  a  legal  tender  ;  and  when  token  or  subsidiary  money  is 
S&  for  convenience  in  the   settlement  of   small  transactions,   it    shall  be  legal  tender  in 
^ing  payments  to  a  very  limited  extent-say,  $10.     In  short,  the  ^^/^^^^^^y  ^«^^f  J^^f/^^ 
Smerience  with  money  is  that  the  duty  of  Government  in  respect   to  coinage  shall  be 
coSfined  simply  to  weighing  and  stamping.     Silver  will  then   continue  to   be  m  great  and 
constant  dTmaldfor  subsidiary  use  and  coinage  :  and  the  experience  of    Canada   ScoUand 
and  Germany  has  shown  how  the  people  of  the  United  States  can  have  and  use  with  safety 
all  the  paper  instrumentalities  of  exchange  that  they  want  or  need. 

13 


ANOTHER  GREAT  OBSTACLE   THAT  BLOCKS    THE  WAY  OF  THE 

NATION'S  PROSPERITY. 

The  removal  of  a  second  great  obstacle  in  the  way  of  business  betterment  in  the  United 
States  will  be  effected  by  a  better  popular  recognition  than  now  prevails  respecting  the 
nature  and  functions  of  money.  Notwithstanding  the  vast  amount  of  writing  and  talking 
on  the  subject,  the  great  mass  of  the  American  people  do  not  understand  this  subject,  and 
a  brief  word  may  be  here  pertinent,  even  if  the  writer  may  expose  himself  by  more  talking 
to  a  charge  of  conceit  and  egotism. 

All  trade  and  commerce  is  the  exchange  of  products  or  services,  and  no  exchange  in 
the  sense  of  buying  or  selling  is  ever  perfected  except  by  the  giving  or  paying  an  equival- 
ent in  products  or  services.  Unless  all  conclusions  based  on  economic  experiences  are  false, 
unless  we  are  entirely  mistaken  in  supposing  that  men  in  their  individual  capacity  and  in 
their  capacity  as  nations,  are  always  seeking  the  most  satisfaction  with  the  least  labor,  wfe 
must  assume  that  men  and  countries  produce  and  sell  their  goods  and  services  to  one  an- 
other for  the  most  they  can  get  in  other  goods  or  services,  regardless  of  the  kind  of  money 
their  neighbors  or  themselves  use.  A  silver  currency  does  not  give  any  additional  strength 
to  the  Hindoo  ryot ;  nor  does  it  increase  the  fertility  of  his  soil,  or  add  to  the  number  of 
inches  of  his  rainfall ;  nor  does  a  gold  currency  detract  in  any  way  from  the  capacity  and 
resources  of  his  rival,  the  American  farmer,  nor  does  the  difference  in  their  respective 
currencies  affect  the  judgment  of  the  buyer  of  wheat  in  Liverpool.  Is  any  single  facta. 
in  the  elements  of  pro''/:ction  and  transportation  by  which  alone  the  terms  of  competition 
are  settled,  changed  by  the  currencies  of  the  several  countries  or  the  mutations  thereof  ? 
No  mutations  were  ever  more  sudden  or  violent  than  those  of  the  currency  of  the  United 
States  during  the  Civil  War.  They  were  not  without  their  effects  ;  but  the  effects  were 
not  of  a  kind  to  change  the  terms  of  competition  in  international  trade. 

A  promis'e  to  pay  is  not  payment ;  neither  is  it  true  monev.  It  is  a  medium  for  facili- 
tating exchanges,  subserving  a  like  purpose  as  grease  on  machinery,  or  as  wheelbarrows, 
carts,  boats,  railroads  and  ships,  though  in  a  greater  degree.  As  a  medium  of  exchange 
it  owes  its  efficiency  to  two  qualities.  It  must  have  credit  behind  it  and  the  provision  of 
legal  tender.  What  is  credit?  An  assumption  on  the  part  of  the  seller  that  the  buyer  is 
both  willing  and  able  to  pay  with  what  constitutes  real  payment.  What  is  legal  tender? 
As  before  shown,  it  is  a  legal  provision  that  the  creditor  shall  accept  a  method  of  payment 
whether  he  will  or  not.  True  money  is  always  a  commodity,  or  real  property,  and  its  ten- 
der Will  always  be  accepted  in  payment  of  a  debt,  to  the  extent  of  its  recognized  market 
value— the  true  test  for  all  commodity  prices. 

But  some  may  say  if  these  conclusions  are  warranted  and  true,  then  the  Federal  Gov- 
ernment during  the  war  was  practically  without  money,  andthatisareductioadabsurdum. 
Let  us  all  pull  our  critics  and  ourselves  out  of  this  pit.  Apart  from  the  true  money— gold 
and  silver— which  the  Government  derived  from  its  duties  on  imports  and  applied  to  the 
payment  of  interest  on  its  bonds  and  for  the  payment  of  war  material  from  other  countries, 
ft  never  did  have  any  money.  What  would  have  become  of  the  bloodstained,  battle-scarred 
greenbacks  if  the  Federal  Government  had  not  won  its  cLuse  and  preserved  the  Union? 
We  find  a  definite  answer  in  what  happened  to  the  Confederate  paper  money.  At  the 
outset,  when  the  success  of  the  Confederate  cause  seemed  probable,  its  value  was  consid- 
.  erable.  When  the  fall  of  the  Confederacy  was  certain  the  value  between  a  true  dollar  and 
the  Confederate  promise  to  pay  a  dollar  was  as  i  to  5,000.  If  the  cause  of  the  Union  had 
not  triumphed,  the  much-lauded  greenback  would  not  be  worth  the  paper  it  was  printed 
on.  If  the  war  had  been  prosecuted  on  the  basis  of  sound  money,  as  it  might  have  been, 
then  if  the  Union  and  Federal  Government  had  been  utterly  ruined  the  value  ot  the  true 
money  would  not  have  been  impaired  in  the  slightest  degree. 

ONE  CERTAIN  RESULT  OF  POPULAR  FREE  COINAGE. 

A  word  in  conclusion  on  the  present  speculative  question  as  to  what  would  happen  to 
the  United  States  in  the  event  of  free  coinage  with  the  legal-tender  provision.  There  is 
nothing  that  more  signally  marks  the  inferiority  of  a  country  than  a  debased  currency,  and 
no  country  can  grow  rich  in  competition  with  other  countries  by  reason  of  such  inferiority. 
There  is  not  a  silver  country  in  the  world  m  which  the  laboring  man  does  not  receive  a 
much  lower  rate  of  wages  than  in  any  gold  country.  Any  impairment  of  the  instrument 
alities  for  effecting  exchange  impairs  trade  and  business.     If  wagons  were  substituted  in 


place  of  railroad  cars  for  the  transportation  of  wheat,  not  a  bushel  of  wheat  could  be  sold 
out  of  t^ie  'Country  ;  for  the  cost  of  transporting  wheat  by  wagons  over  good  roads  for  a 
distance  of  125  miles  would  entirely  exhaust  its  value  at  the  point  of  its  production,  Th« 
impairment*' of  our  currency  as  a  medium  of  exchange  by  the  creation  of  doubt  as  to  its 
value  in  thp  settlement  of  contracts  of  debts,  and  the  cost  of  insurance  against  possible  loss 
to  buyers,  would  operate  m  a  like  manner.  When  the  entire  business  of  the  country — do- 
mestic, and  foreign — is  taken  into  account,  a  difference  of  fractions  of  cents  would,  in  the 
aggregfate,  represent  millions  of  dollars.  A  difference  of  a  few  cents  in  the  price  of  a 
bushel  of  (wheat  may  mean  profit  or  loss  to  a  whole  year's  crop.  Certainly  this  is  not  the 
time  to  try  currency  experiments. 

Ther^;  is  nothing  more  nonsensical  than  the  plea  put  forth  by  advocates  of  an  enlarged 
silver  coinage,  that  the  volume  of  money  determines  prices  and  the  activity  m  trade 
determines  the  volume  of  money  that  can  be  properly  used.  Trade  creates  money. 
Money  does  not  itself  create  trade.  Credit  in  trade  is  as  valuable  as  cash,  and  is  much 
cheaper.]  The  best  proof  of  the  absolute  truth  of  these  assertions  is  to  be  found  in  the 
fact  that  although  the  volume  of  currency  in  the  United  States  has  been  increasing  ever 
since  the  alleged  demonetization  of  silver — from  $752,000,000  in  1873  to  $1,601,000,000  in 
1895,  or  fijoni  S17.16  percapitain  1S75  to  $22.93  in  1895 — prices  all  this  time  have  been 
<jenerally  declining ;  or  this  other  fact,  that  while  during  the  last  twenty-five  years  the  vol- 
ume of  trade— domestic  and  foreign — of  Great  Britain  has  greatly  increased,  its  volume  of 
money  lias  not  increased  to  any  appreciable  amount. 

CONCLUSION. 

The  following  words  spoken  by  the  Hon.  Thomas  F.  Bayard  in  the  Senate  of  the 
United  States  during  the  financial  panic  of  1873,  have  much  that  is  pertinent  to  the  present 
embarrassed  and  disturbed  condition  of  the  country  :  "I  do  not  think,"  he  said,  "  that  it 
is  in  the  power  of  any  man  or  party  instantly  to  relieve  the  country  from  the  financial  em- 
barrassments that  are  now  upon  us.  Time  must  work  relief.  Wise  laws  will  greatly 
assist  and  hasten  the  returning  prosperity,  which,  when  it  comes  back,  should  rest  upon  a 
sound  basis.  That  is  all  that  wise  laws  can  be  expected  to  do.  You  cannot  suddenly 
make  a  nation  prosperous,  or  cure  the  ills  of  extravagant,  corrupt,  or  reckless  administra- 
tion. All  you  can  do  is  to  get  the  Nation  upon  a  path  of  economy  and  honesty,  then 
gradually  prosperity  may  come  again." 

Norwich,  Conn.,  September  4,  1896.  DAVID  A.  WELLS. 

[From  the  New  York   Tribune  of  September  yth,  i8g6]. 


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